This letter describes the results of a Food and Drug Administration (FDA)inspection that concluded on November 21, 2006. FDA investigator Joseph L. Despins met with Dr Hallenbeck and other members of your staff to review your firm's conduct of study [redacted] performed under the Good Laboratory Practices (GLP) regulations [Title 21, Code of Federal Regulations, (CFR) Part 58]. The inspection was conducted as part of FDA's Bioresearch Monitoring Program, which includes inspections designed to review research involving investigational products.

At the end of the inspection, a Form FDA 483, Inspectional Observations, was issued and discussed with Dr. Hallenbeck and your staff. We received and reviewed your firm's December 1, 2006 letter responding to the Form FDA 483.

Based upon the information obtained during the inspection and your December 2006 letter, we conclude that Neotropix, Inc. (Neotropix) has violated GLP regulations governing the proper conduct of nonclinical studies as published under 21 CFR Part 58.

The applicable provisions of the CFR are cited for each violation.

1. Failure to monitor each study to assure management that the facilities, equipment, personnel, methods, practices, records, and controls were in conformance with FDA GLP regulations, and failure to inspect each nonclinical laboratory study at intervals adequate to assure the integrity of the study and maintain written and properly Signed records of each periodic inspection. [21 CFR §§ 58.35(a) and 5.35(b)(3)].

A. The final study report for [redacted] submitted to FDA states that quality assurance inspections occurred on 4/18/05, 4/20/05, and 5/24/05, and that findings were submitted to the study director and to management. There is no documentation that these inspections actually occurred because there are no Quality Assurance Unit (QAU) audit reports for these dates.

B. The [redacted] protocol required that the [redacted] collection and test article administration processes were to be inspected, but there are no QAU audit reports documenting inspections of these processes.

C. The QAU never identified that the following [redacted] were unaccounted for [redacted].

These specimens represent eight of the [redacted] animals in one of the [redacted] dose cohorts required for [redacted] studies at the [redacted] week time point. The box packed on 12/8/05 was not found until almost one year later during the FDA inspection. The final report for study [redacted] was signed by the study director on 04/06/06 with no indication that these samples were missing, as evidenced by the lack of protocol deviation report in the study file.

Your letter acknowledges that these samples were not analyzed. You explain that these animals were administered an [redacted] test article dose and were not included in the final study report. We disagree with your claim that these samples "had no bearing or impact on the study data." You seem to base this conclusion on the final outcome of the higher dose that was tested. The study protocol specifically required assessment of [redacted] parameters for [redacted] animals in each group because the toxicity profile of the test article was unknown.

We note that your letter includes new SOP for chain of custody.

More than [redacted] study samples were repeatedly analyzed by [redacted] with no documented investigations of unexpected results.

Dosage Number of Study Sample Re-Runs per Single Study

Dosage Group

Number of Study Sample Re-Runs per Single StudySample

3-Re Runs

2-Re Runs

1- Re Run

Sub-Total

[redacted]

[redacted]

[redacted]

[redacted]

[redacted]

[redacted]

[redacted]

[redacted]

[redacted]

[redacted]

Your letter includes new SOPs for conducting investigations of unexpected results to correct the deficiencies noted. During the inspection Dr. Burroughs stated that he would document why each sample was re-run. Please submit that information in response to this letter. Please also explain how you determined which results were reported in the Final Study Report.

Your letter states that "reporting of quality assurance (QA) activities was not done as it should have been" but "there is documentation indicating that periodic inspections took place and that the integrity of the study can be assured." You state that all future studies will be closely monitor d by the QAU at appropriate intervals, and all activities and reports will be properly noted and documented. In consideration of the deficiencies noted above, we disagree with your statement that the integrity of the study can be assured.

2. Failure to have written standard operating procedures setting forth nonclinical laboratory study methods that management is satisfied are adequate to insure the quality and integrity of he data generated in the course of a study. [21 CFR § 58.81(a)].

A. The following SOPs were incomplete when approved by the QAU and management in that the Purpose, Scope, arid/or Responsibilities sections did not have any information except the phrase, "To be developed at some time in the future."

Six other SOPs were approved for use but appeared to be in draft condition because of the existence of many handwritten annotations made by the QAU.

Your letter acknowledges these SOPs were incomplete, and states that all of the questionable SOPs have been replaced

The deviations listed above are not intended to be an all-inclusive list of GLP deficiencies that may exist at your testing facility. As a GLP testing facility, you are responsible for ensuring that you conduct nonclinical studies s according to FDA regulations.

This Warning Letter is issued to you because of the serious nature of the observations noted at the time of the FDA inspection. Please be advised that failure to implement effective corrective actions and/or commission of further violations may result in the FDA taking regulatory action without further notice.

Within fifteen (15) working days of receiving this letter, lease provide written documentation of the additional actions you have taken or will take to correct these violations and prevent the recurrence of similar violations in current or future nonclinical studies.